University of Chicago
Type of paper: Thesis/Dissertation Chapter
Analysis of Current Event at Telstra
Management issue is a common phenomenon that an organization attempting to maximize profits must grapple with. Telecommunication as it is the case with Telstra Corporation Limited has been distinguished by highly competitive market. On the same breath, actors and competitors on the market have been seen struggling with the increasing cost of operation, production, development and mature market. In light of this, the Company faces management issue when it comes to decision making, integrating new models and working within the realm of theoretical frameworks. ResearchMoz (2013) notes that in an industry where competition is rife, analysis of a company’s management issues and current events encompass the recognition of different strategies that enable it maintain competitive position. Despite these positions, it has to be recognized that analysis of management issues of Telstra Corporation Limited must first recognize the position of the Company with regard to managing risks as postulated by the Company’s Chief Risk Office (Schermerhorn et al., 2014).
Ideally, Telstra Corporation Limited has Corporate Social Responsibility (CSR) to undertake and as one of its management issue or strategy. Consequently, such must be conceptualised through its laid platform, structure, financial reports and annual reports. Similarly, evidence based researches have shown that the first step in understanding management of a company is to integrate its undertaking when it comes to CSR and how sustainable the Company intends to operate with regard to the environment, competitors and specific objectives (Millmore, 2007; Hubbard, 2008; Bardoel, 2012). Based on the Company’s Corporate Social Report 2014, its CSR is embedded on four critical issues; internal environment, external environment, customers and sustainability (Corporate Social Responsibility Report, 2014). That is, the commitment of the Company towards corporate responsibility starts with simple but straight forward commitments that cover its areas of operations and targeted objectives. From its principled perspective, the primary corporate responsibility can be summarised as follows:
Provision of the country a foundation that ensures economic growth, sustainability prosperity, productivity improvement and global competitive
Contributing towards resources; increasing technology, product services and people in employment to support the communities in which the Company operates and the specific needs of community at large
Give a leading stewardship of environment by first and importantly, conservation, efficiency in the usage of resources, reducing and maintaining environmental footprint and reduction of operation costs (e.g. it took part in the Mobile Phone Recycling Program that was co-ordinated by the Australian Mobile Telecommunications Associations (AMTA) (Daley et al. 2014)
Based on the Company’s corporate social responsibility as one of the management issues and as reported in the article, there is an integration of new management approach and that is the fact that risk management approach has been tailored to facilitate maximization of profits.
Conversely, it can be established, based on its business principles and risk management approaches that the CSR has succeeded in the reduction of any adverse effects on and injury to the environment. Such is also embedded on the desire to preserve the beneficial qualities of the environment, while ensuring quality products and services in Australia (Baigh, 2014). In addition, to the above principles, analysis of the company’s management of this particular issue has also considered profits to the Company thus concluding that Telstra is revamping on this particular management strategy which is succeeding in line with its short and long term goals. To conceptualise this argument, scholars such as Hooper and Potter (2006) have drawn a thin line between CSR as a management issue and as a marketing issue. To ascertain that the CSR approach as contextualized is a management issue but financial or marketing issue, in most cases, companies always engage in pricing strategies which also depend on value pricing coupled with strategic markdowns. In such cases, this makes sales of their products to go down since it cannot compete effectively with other products. Additionally, products face what Hamlin (2012) terms as ‘a society of shifting priorities’ (p.281). Therefore there is pressure to keep up with the emerging social needs by style modification. It is for this reason that any decision to modify must be embedded on the premise to meet the needs of the targeted consumers. While the explanation above provides for what would constitute a marketing issue, what Telstra engages in is management issue. According to Johnson et al. (2011), CSR is not only management issue but a current one the sense that it deals with financial performance, top management, chief executive and shareholders. Herewith, the management issue within the context of Telstra is the responsiveness that should be taken because in a competitive environment where there are other operators such as Huawei and Vodacom, managers are supposed to intervene in accordance with their position and power, especially where management can fail to respond to economic challenges and changes.
Also related to CSR as a marketing issue is ethical decision making approaches. According to the article, the process of identification of managing risks through ethical decision making is an integral part of the Company’s governance framework and management issue which help in the realization of the success of the strategy as well as financial prospects for future operations. Telstra business ethics entails standards and principles that guide managers, individuals and work group behaviour in line with telecommunication and terms of service in Australia.
Additionally, it is important to note that stakeholders of the Company make these conventions (principles) and such have been codified as regulations and laws. Contextualising this definition within the frameworks business management issue; ethical decision making help Telstra family design strategies that eliminate misconduct. According to Peng (2014) there are three significant components that sum up its ethical decision making as critical management issue; ethical decision making being individual factors, ethical decision making being Company’s relationship with others and ethical decision making being opportunities available for the Company. Basically, while this issue might to be seen as revamp on a current management strategy, it has been applied successfully since the Company bases the three components on behaviourist theory where what matters is what individuals in the Company can do rather than specific quality or attribute. That is, different patterns of individual behaviours are linked to ethical decisions that are made by the Company and such are geared towards the realisation of the goals and objectives that have been set by the Company.
To contextualise the success of the Company with its approach of ethical decision making as one the management issue, Perren and Burgoyne (2010) report that Telstra has been engaging with Communication Workers Union with a view to offering better terms of service and transparency in supply management. For instance, in 2013, the Company engaged Low-Income Measures Assessment Committee (LIMAC) (this is an example of Communication Workers Union which is viewed as independent and transparent) which made changes to the package the Company was initially giving to its workers and suppliers. In connection to this, the Company, this particular issue has successful been engaged in what Katzenbach and Smith (2005) term as ‘vertical management’ (p. 37). Vertical management within the context of ethical decision making is a case where a Company liaises with regulatory organization so as to have a common agenda and conform to the requirements of the industry. Conceptualist theorists and ethical formalism argue that ethical decision making process in management encompass evaluations of fairness product stewardships but with respect to firm’s overall culture. In summary, with ethical decision making process as one of the management issue, Telstra has a well-defined management and leadership structure which is focused on the achievement of defined objectives including ‘green’ managements. Lastly, this issue departs from being finance or marketing issue on the ground that the approach lacks market orientation is a model that concretizes the strategy of finance and marketing. Senge et al. (2007) define this theory (market orientation) as a strategy that ensures all products and services as undertaken by Companies are oriented towards specific demands of clients and customers.
Still on ethical decision making as one of the Company’s management issue or approach, Telstra’s planning, leading, organising, controlling and functioning is based on choices made on guidelines laid. According to article, one of the important issues to not is that the Company’s risk management frameworks are aligned with ISO 31000 Risk Management (Baigh, 2014). While this is an indicator of a management strategy or practice that has succeeded, underpinnings of theories of issue management are significant to the Company additionally; technical and commercial objectives remain axis for the Company. The success in management of this issue is conceptualised with regard to audience or customer satisfaction. This is to mean that in as much as its ethical decision making remains a priority as a management issue, targeted markets shapes such priorities—an aspect Aras and Crowther (2009) terms as ‘ascertaining the success of management strategies and policies in downstream and upstream relationships’ (p. 213).
From Michael Patterson (Telstra’s General Manager for Tasmania) statement on the legal battle the Company had with Optus, it can be realized that the Company’s planning, leading, organising, controlling and functioning are in line with the tenet of management of telephony inputs and components that are required in the market. This is an indication that there is long term transparency and conformity to good practices. Assessing Corporate Social Report 2013 vis-à-vis opening of the China’s SouFun Sensis, there is evidence that efforts are diverted to supply chain relationships with third party suppliers as well as other competitors. It is important to note that Telstra is overemphasizing on CSR strategies; an aspect that may affects its ethical decision making. If this stretches beyond what the Company can handle, strategic alignment with other sectors may be affected. Basically, this is where this strategy differs from the aspect of marketing in the sense that according to the theory of signaling, the best way to market a product is to engage a brand or product in competitive signal that are intended to pass information to potential consumers with an aim of making such consumers believe that competing products are substandard (Cole, 2012). This is exactly how Cadbury for instance has succeeded in capturing the attention of their targeted market every time they engage in marketing. Telstra, through this does management and not marketing as they do not engage in competitive signaling.
As a management approach, Telstra looks at ethical decision making differently. That is as a management issue, ethical decision making is seen in terms of transparency when it comes to critical corporate accounting and statements. One of the critical goals of the Company is to attain what it terms as ‘front-line management’ (Baigh, 2014 p.26). The benefits of the people within and around have been necessitated through avoidance of misleading information. The continuum of growth in economy resonates around a transparent business operation—which is also a recipe of what this assessment considers to be a successful management approach.
Synopsis on the Management Issue
From the perspective of undertakings in the Company, the aspect is a management issue in the sense that it analyses the environment issues in lieu of external factors that impact business activities. On the other hand, the purpose of the management issues as analysed is to evaluate and determinate competitive advantages as well as threats a Company has with regard to its operations. These analyses recognise stiff competitions, threats and opportunities faced by companies such as Optus, Vodafone and 3 Mobile. In as much, this analysis considers Telstra due to its cutting edge when it comes to services such as broadband, hosting, directory and pay TV which are not as extensive in other companies. Since the management issue has been a success, revamping of a current policy is twofold; first, there is need to strategize the management issue identified to an extent that the company benefits from the economies of scales and the strong relationships with suppliers, which will place it in a strong bargaining position with its upstream partners and allows leveraging the costs. Strategizing the management issue to attain this goal means that a focus on customer-relationship and loyalty creation, as well as investment in research and technical development (R&D) to reduce the costs of services so as to compete with niche operators. Secondly, revamping on the current management issue must assess the possibility of working alongside its downstream partners to deliver triple-play solutions in voice, data and video services, expansion of data download quotas and continuous innovation in fixed line services, as opposed to mobile services, to offer incentives to its clients.
Similarly on the question of whether Telstra is handling the identified management issue appropriately is manifold but the assessment will review two issues that offer succinct answers to the question. First, proper management of a company circles around how best a company maximizes a profit and expands networks (ResearchMoz, 2013). Through the management issue, Telstra has leveraged the risks of economic downturns by diversifying its income channels. The growing domestic market and the boost in 4G technologies enable further market penetration and help to reduce the pressure of external factors. Secondly, the Company through the management issue has pursued an investment heavy strategy to grow its existing network. However, financial indicators, outline a challenging internal environment in terms of liquidity and internal funding options.
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